Naresh Goyal, founder, chairman and chief executive officer of Jet Airways, is relieved and elated that he has finally ensured that his airline becomes the first private Indian carrier to establish a beachhead in the United States. It makes its debut on August 5, flying to Newark International from Mumbai via Brussels.
In the two intervening years, Goyal has had to deal with everything from allegations of a trademark infringement by a company with a similar name based in Bethesda, Maryland, to allegations of an opaque ownership structure and his alleged links to organized crime in India and overseas -- every claim, Goyal says, "Absolutely baseless."
Ultimately, the Department of Transportation concluded that the alleged trademark infringements and rumours of underworld links were no reason to prevent Jet Airways doing business in the US. This decision was catalysed by the Open Skies Agreement between the US and India.
At the 32nd anniversary summit of the US-India Business Council, Goyal was one of the honoured guests, introducing Boeing chairman and CEO James W McNerney Jr, a recipient of USIBC's Global Vision Award.
In an interview with Managing Editor Aziz Haniffa, on the margins of the summit, the entrepreneur expressed confidence that Jet Airways would revel in the competition and grab a share of the massive US-India travel market.
He also spoke of the company's plans to acquire a fleet of wide-bodied aircraft to meet the needs of the US-India travel traffic and acknowledged Jet's close association with Boeing, which has provided more than 80 per cent of the aircraft in his company's inventory.
At the USIBC event you spoke of Jet Airways' direct flights to America beginning August. How did things work out so that you became the first private Indian airline to fly into the US?
We are starting our operations from August 5. We are setting up a hub in Brussels, and flights will come over from Mumbai. . . September 5, we will have a flight that will leave from Delhi for Brussels and then to Toronto.
So through Brussels, you can connect from Mumbai or Delhi and then even from Gujarat or any [other] point . . . and come to the US and Canada. Then in the next two months, we will start a third flight from Bangalore and that will be Bangalore, Brussels, JFK [John F Kennedy Airport in New York].
So from all over India you can connect via Brussels to JFK. Also, Americans coming to Newark, New York or Toronto will have Jet Airways they can fly in. Then we will add San Francisco via Shanghai and then Los Angeles via Brussels. Then we will connect from Ahmedabad and Chennai.
So, basically, we will have flights from Mumbai, Delhi, Chennai, Ahmedabad and Bangalore connecting to all these American cities and Toronto.
I believe Jet Airways had aggressively sought permission to fly to the United States and to get into the American market for several years. . .
We have had these plans for the last two years. As we all know, for India, the United States is the biggest market -- both the economies have been growing exponentially as we've been hearing all day at this USIBC conference. And, then there are more than 2 million Indian Americans, and there may be also several thousand reverse citizens, some of them still holding Indian passports: PIO [Persons of Indian Origin].
All of them are doing very well and so there is a lot of travel traffic. In addition, there are Americans travelling to India in large numbers in recent years, with business and trade increasing. So, you can see why the US has always been the most important market we've been wanting to get into, followed by London and other markets.
Has the Open Skies Agreement between the United States and India been a catalyst in bringing about these kinds of link-ups that allow the Indian private-sector aviation industry to gain entry into the huge American market?
Absolutely. The US is the only country with which India has an Open Skies policy. It is a very good agreement as far as we in the private sector, are concerned. Now Delta is flying direct to India, Continental has started non-stops from Newark, and American is flying from Chicago. So there are a lot of US carriers coming.
I am glad that Jet Airways has joined them and will also be flying under the Open Skies Agreement.
Other private Indian airlines are also raring to enter the market. Is the pie big enough to ensure that Jet Airways makes decent profits in the long term?
Competition is always very good. We all [thrive] on competition. I think the other airlines will be worrying about Jet Airways. You've seen the product we have tooffer at this conference.
JetAirways will be the best in the industry. . . not only Indians will be proud of it, but I think all our customers will be proud that an Indian carrier can match the best the world has to offer. Our standards will be like the best Asian standards -- from Cathay [Pacific] to Singapore [Airlines].
Our prices will be like [those of] BA [British Airways], Lufthansa, Singapore [Airlines]and other airlines. We, as Indian carriers, understand the habits of our [Indian] customers. . . We will also be catering to the service and the requirements of our American friends here.
So are you challenging both American and Asian carriers?
Absolutely.But we will work closely with . . . our partners [in the US]. We already have partnerships with some US carriers [that] . . . will bring a lot of value-add to the customers. We will have a win-win situation.
What has been the driving force behind the success of Jet Airways and its quick rise to the top in the domestic Indian market and now, in your preparation to enter the American market?
I firmly believe it is the commitment of our people -- their team-work,training and sense of pride. Our people are passionate about their company and they know that whatever commitments Jet Airways has made have been delivered.
As you know, we've been flying to London -- we are already the first choice --and the United States is now going to become a major, major market for us. We are once again counting on being the first choice.
How are you going to buy aircraft to serve the huge US market? Have you already entered into agreements with the major aircraft manufacturers, such as Boeing, Airbus, etc? And, what are your long-term plans, given that as you cross the Atlantic, your fleet will have to become larger?
We've already ordered several aircraft and the deliveries of aircraft we bought in 2005are on tap. In 2005, we bought 10 777 300 ERs which has all three classes -- the first class, where we provide cabins but like in a private suite, and the premier class -- the business class -- and it is like a first class in most other airlines.
Also,for the first time, an airline even designed an economy class seat where you can almost recline completely and rest.
We have already got two 777 300ER's delivered, and two will be delivered next month. The remaining six planes will be delivered by February 2008.
Then we have ordered 10 330 200'sfitted with GE engines. Two of these have been delivered and the rest are going to be delivered soon. So all 10 330 ER's will be delivered before October 2008.
Then we have ordered 787s -- the Dreamliners -- the delivery of which will be made in 2012. So we have about 30 wide-bodiedaircraft coming.
So you have a significant association with Boeing in terms of purchases, training, etc?
Yes. In fact, like I said when I introduced Jim McNerney [Boeing EO, who along with Reliance Industries chairman Mukesh Ambani, was presented with the USIBC's Global Vision awards],our growth journey would not have been possible without our close association with Boeing, who have been our partners since our inception.
Today, 80per cent of our fleet is from Boeing. It's been Jim's global vision and his embrace of India, which has been instrumental for this cooperation and partnership.
They [Boeing officials]have always approached the Indian market with sensitivity and determination and been largely responsible for the development of India's aviation infrastructure. And, this is why Boeing -- because of their commitment to India -- has been rewarded with so many orders for aircraft from Indian carriers that will create several thousands of jobs in America and India.
Do you feel this inventory is going to be adequate for the growth you envisage as you enter the US market and expand your international presence?
Iwill not say it's enough, but it's a business plan for the next three years. Now we are preparing our next business plan. This current business plan takes care of 2007 to 2010, [the next] 2012 and beyond.
AsI told you, we'll definitely need more aircraft to serve more markets.
So you are confident that Jet Airways' growth in the next five to six years will be on an upward trajectory, whatever the market fluctuations, and the tough times the US carriers endure? Some of them are just coming out of bankruptcy and several others like the no-frills Independence Air have simply gone out of business?
Jet Airways has always made money in the last 14years when everybody was losing money. Even our last quarter results [showed a profit]. Jet Airways was the only airline that made money. So we will definitely continue to make money and are certain the customers will have confidence in us. They know we will deliver.